The Digital Markets, Competition and Consumers Act 2024: Article 4 – green claims

The scrutiny and regulation of green claims is therefore nothing new. The past four years have signposted the intention of regulators to clamp down in this area. The issue with this to date has been the lack of teeth in the regulatory regime. The DMCCA changes this. It principally does this by empowering the CMA to directly investigate and penalise breaches of consumer law with fines of up to 10% of global turnover. It is likely that CMA investigations will be more frequent and much quicker putting businesses in a position where they will need to justify their approach to consumer law under significant pressure.

Under the Act, green claims may, in certain circumstances, mislead consumers by virtue of their presentation and/or the absence of information even where nothing within the claim is untrue or incorrect. Where they are likely to make the average consumer make a different transactional decision and are in any way misleading, this will constitute an offence under the DMCCA.

Moreover, where a trader has not exercised appropriate care to ensure that its website, product information, customer interface or supplier due diligence (even in relation to third party products) operate in such a way to avoid the exposure of consumers to non-compliant green claims, a trader may contravene the requirements of professional diligence. An offence may be committed where this was likely to change consumer behaviour.

Distilling the GCC, the undertakings to date, and Supplementary Guidance, traders must ensure that:

• Claims are truthful, accurate, clear and unambiguous, fair and meaningful. They must be substantiated and not omit, hide or cherry pick information.  The whole life cycle of a product or service must be considered.

• Vague or unclear terms must be avoided (like green, sustainable or eco-friendly).
• Claims must be specific and limitations must be stated, e.g. if a claim is based on specific parts of a product’s life cycle.
• Environmental targets must be presented clearly and specifically, with consideration of the full life cycle and potential other limitations such as consumer use.
• Any comparisons must be specific and clear.
• Products are not categorised together as sustainable too broadly.
• Affiliations and accreditation schemes must be used carefully.
• Logos, imagery and icons do not inadvertently give the impression of green credentials.

Traders would be well advised to:

• Implement a green claims policy with specific thresholds/requirements as well as a claims risk assessment including mitigation measures to reduce the risk of a claim being perceived to be misleading.
• Consider an outward facing green claims policy for consumer reference. This may be used to describe technical words or language which a retailer uses.
• Provide training on green claims to all employees.
• Operate and maintain its own green claims code for suppliers and contractors.
• Review, monitor and audit all green claims and take corrective actions where necessary.

This article is the last in a series exploring the new legislation in full. Take a look at the previous articles here.

• Article 1 – scope, key changes and enforcement
• Article 2 – unfair commercial practices – overview and scope: misleading acts, omissions and aggressive practices
• Article 3 – automatically unfair commercial practices

If you have any questions about how the DMCCA applies to you, please contact a member of our Regulatory Team today.